Procedural Posture
Business

Procedural Posture

Defendant sellers challenged an order from the Superior Court of San Luis Obispo County (California), which denied their Code Civ. Proc., § 425.16, special motion to strike plaintiff buyer’s complaint for breach of contract and fraud.

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Overview

The sellers sought and obtained preliminary approval for a high density tract map, contrary to the parties’ agreement that the sellers would use their best efforts to obtain approval of a low density tract map. The court held that the sellers submitted the high density tract map in official proceedings and in furtherance of the sellers’ right of petition and free speech, within the meaning of § 425.16, subd. (e)(1), (2). The court stated that conduct alleged to constitute breach of contract also could be constitutionally protected speech or petitioning. The buyer established a probability of prevailing under § 425.16, subd. (b)(1), as to the breach of contract claim because the buyer showed a prima facie case for breach of contract. As to the fraud claim, which was based on the sellers’ alleged representation to the buyers that the increase in the number of lots was necessary to obtain the city’s approval, the sellers’ right of petition and free speech was not implicated; thus, the fraud cause of action was not based on any protected activity, and the buyer did not have to show a probability that it would prevail on its fraud claim.

Outcome

The court affirmed the trial court’s order.